DSEX hits 3-month high as investors stay upbeat

Stocks extended gains for the sixth consecutive week, with the prime index of the Dhaka bourse hitting three-month high, as buoyant investors continued their buying spree surrounding the upcoming earnings and dividend declaration season.

Along with improving some key macroeconomic indicators, the Bangladesh Bank's latest decision to cut the reverse repo rate and gradual strength of local currency against US dollar, boosted investor confidence, market analysts said.

The central bank lowered the standing deposit facility rate, also known as the reverse repo rate by 50 basis points to 8 per cent this week while the local currency renewed strength against the US dollar also helped to restore investors' confidence.

Despite taking a three-session breather early in the week due to sector-specific profit booking, the bullish momentum regained strength in the latter half following the central bank's announcement.

DSEX, the key index of the Dhaka bourse, finally settled the week 64 points or 1.27 per cent higher at 5,132, the highest level in more than three months since April 15 this year.

The DSEX regained around 494 points in the past six straight weeks while the market capitalisation surged by Tk 370 billion during the time to Tk 6.87 trillion

In its weekly analysis, EBL Securities said the investor positive market sentiment remained resilient bolstered by the central bank's decision to cut the reverse repo rate by 50 basis points and rising expectations of an imminent the main policy rate cut amid signs of easing inflation.

The bullish momentum persisted with a surge in investors' participation ahead of the upcoming earnings and dividend declaration season, said the stockbroker.

Despite lingering concerns over the proposed higher tariff on Bangladeshi exports, the investor sentiment remained resilient amid the central bank's latest decision along with positive macroeconomic developments, said a leading stockbroker.

This week, price hikes of several blue-chip stocks such as BRAC Bank, Square Pharmaceuticals, IDLC Finance, LafargeHolcim Bangladesh and Beximco Pharma, pulled the market index up, jointly contributing almost half of the weekly gain to the DSEX.

The blue-chip DS30 index, a group of 30 prominent companies, jumped 28 points to 1,937 and the DSES Index, which represents Shariah-based companies, gained 19 points to 1,120.

This week also witnessed robust investors' participation, with the year's highest single-day turnover of Tk 7.90 billion recorded in the last trading session of the week.

Apparently, investor participation surged as the total turnover reached Tk 34.08 billion this week, up from Tk 25.45 billion the previous week.

Subsequently, the average daily turnover jumped to Tk 6.82 billion, 7.15 per cent up from the previous week's figure of Tk 6.36 billion.

The banking sector kept its dominance in the weekly turnover chart; accounting for 13.6 per cent of the week's total turnover, followed by the pharma sector (12 per cent) and textile sector (10.7 per cent).

The market upbeat vibe continued to lure the investors to all major sectors, particularly in the non-bank financial institutions sector, soaring 5.4 per cent, riding on sector heavyweights Bangladesh Finance and IDLC Finance.

It was followed by general insurance, power, pharmaceuticals, telecom, engineering, and banking sectors.

Most of the traded issues saw price appreciation, as out of 394 issued traded, 290 closed higher, 80 ended lower and 24 issues remained unchanged on the DSE trading floor.

BRAC Bank was the most-traded stock with shares worth Tk 1.03 billion changing hands, followed by Sea Pearl Beach Resorts, Khan Brothers PP Woven Bag Industries, Midland Bank and Beach Hatchery.

The Chittagong Stock Exchange also ended sharply higher, with its All Share Price Index (CASPI) soaring 251 points to 14,329, while the Selective Categories Index (CSCX) rose 146 points to close at 8,744 points.

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